Yen declines for eighth day after exports slump; euro advances

The yen fell for an eighth day against the dollar, the longest streak in seven years, as a report showing Japan’s exports fell the most since the 2011 earthquake fueled bets the central bank will add more stimulus.

The Japanese currency dropped versus all of its 16 most- traded counterparts after Economy Minister Seiji Maehara pressed the Bank of Japan yesterday for more action to boost the economy. The euro rose after Spanish Prime Minister Mariano Rajoy extended an electoral majority in his home region of Galicia, vindicating the government’s austerity program. South Africa’s rand appreciated against all of its major peers.

“People are pricing in the possibility that the BOJ is going to ease,” Andrew Busch, a global currency strategist at Bank of Montreal in Chicago, said in a telephone interview. “We know that Japan is hurting economically, and today we got the first glimpse of how bad it is with this export data.”

The yen fell 0.7 percent to 79.84 per dollar at 9:16 a.m. New York time after dropping to 79.88, the weakest level since July 12. Japan’s currency declined 0.9 percent to 104.17 per euro. The euro strengthened 0.2 percent to $1.3048 after dropping 0.7 percent over the previous two trading days.

Australia’s dollar weakened versus most of its major counterparts before a report this week that may show inflation held near the slowest in 13 years, providing scope for the country’s central bank to cut interest rates.

The Aussie depreciated 0.1 percent to $1.0321 and reached $1.0302, its lowest level since Oct. 17. It rose 0.6 percent to 82.39 yen.

Rand Climbs

The South African rand was the biggest winner versus the greenback among major currencies as foreign investors resumed purchases of the country’s bonds. Prospects of an interest-rate cut fell after retail sales grew more than expected in August.

The rand gained as much as 0.7 percent before trading 0.4 percent stronger at 8.6311 per dollar. It appreciated 0.2 percent to 11.2622 per euro.

Implied volatility among major currencies, which signals the expected pace of price swings, touched 7.54 percent, a JPMorgan Chase & Co. index for Group-of-Seven currencies showed. The gauge fell to 7.47 percent a week ago, the lowest since October 2007. Lower volatility makes investments in currencies with higher benchmark lending rates more attractive because the risk in such trades is that market moves will erase profit. The index’s average over the past five years is 12.4 percent.